NIGHT SHIFT DIFFERENTIAL . *same monthly rate applied in the computationRegular holiday: (200% x basic pay)18,000 x 2 = Php36,000Holiday pay (i.e., 20 working days/month): 36,000/20 = Php1,800/day, Regular holiday that coincided on a scheduled rest day: (260% x basic pay)18,000 x 2.6 = Php46,800Premium pay (i.e., 20 working days/month): 46,800/20= Php 2,340/day. Since differential pay is company policy, not something regulated by the government, there’s no standard way to pay it. Knowing the level of compensation your employees should receive if they work the extra hours on regular workdays and, helps you establish a reputable image for your business. Law on Night Shift Differential in the Philippines WHAT IS NIGHT SHIFT DIFFERENTIAL Article 86 of our labor provides that every employee shall be paid a night shift differentialof not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning. Working hours in the Philippines cannot exceed eight hours in a day, not including the mandatory one-hour lunch break. The main question you have to ask is: what kind of non-working day is this? Night Shift Differential (NSD) refers to the additional compensation of ten percent (10%) of an employee’s regular wage for each hour of work performed between 10 p.m. and 6 a.m. When they work the evening shift, they are paid a shift differential of $1 an hour. Some employees, however, are exempt to this rule. If work is performed on a rest day which is also regular holiday, worker is paid 260% of the normal wage rate. 4 Simple Charts to explain Philippines Premium Pay Rate FIND OUT THE OVERTIME PAY RATE, NIGHT SHIFT DIFFERENTIAL PAY RATE, REST DAY PAY RATE AND HOLIDAY PAY RATE. Night shift differential. As far as the rate of night work is concerned, night shift employees must be paid a differential of at least 10% of the regular wage for each hour of work performed between 10:00 p.m. and 6:00 a.m. 86. Employees extending their work hours during in the night shift will be given an additional 25% as his overtime rate with their regular hourly rate, plus ten percent 10% for every hour of working between the covered period. Overtime pay rates are covered under the Labour Code. How to Compute Overtime Pay All employees required to work beyond the normal 8 hours are entitled to overtime. Under R.A. 9504 overtime pay, night shift differential pay and hazard pay received by such minimum wage earners are exempt from income tax (Section 2, R.A. 9504). The list includes managers, field personnel, domestic helpers, workers who are hired for personal service of another, members of the employer's family who depend on employees for support, and workers whose compensation is results-based. Night work is regulated under the Labour Code which provides for a night shift differential. Night shift differential is from 10pm to 6am the following day. Under R.A. 9504 overtime pay, night shift differential pay and hazard pay received by such minimum wage earners are exempt from income tax (Section 2, R.A. 9504). Shift differentials aren’t required by federal law, but many companies, especially in the manufacturing industry, offer them as a way of encouraging employees to take an “undesirable” shift such as the night shift or a weekend shift. For example, the employee is paid $10.00 per hour plus a $2.00 per hour shift differential for the night shift. Where an employee is made or permitted to work on his scheduled rest day or a special day, he is paid an additional compensation of at least 30% of his regular wage (130% of the normal wage rate). ..- - When the schedule of working hours fall; partly within 6:00 PM to 6:00 AM, the night-shift differential pay shall be paid only for the hours within 6:00 PM to 6:00 AM of the following day.- Employees who work between 10:00 PM and 6:00 AM are entitled to night shift differential. Night shift differential. Source: §86 of the Labour Code, as amended. The normal hours of work of any employee cannot exceed eight (8) hours a day. 22009 Guidelines on the Adoption of Flexible Work Arrangements Part III, point 1. Overtime pay for work beyond eight hours Night shift differential at 10% increment for work done from 10:00 PM to 6:00 AM Minimum wage earners in the Philippines are not subject to withholding tax and are not required to file income tax returns at the end of the year for obviously, they, will not be any tax due under such exemption. One of the reasons is the night shift differential pay. Art. The maximum working hours on such days cannot exceed 12 hours per day. Women and young persons are prohibited from night work. Monthly rate: Php10,000Daily rate (20 working days/month): 10,000/20= Php500Hourly rate (8 hours): 500/8= Php 62.50, 110% x number of hours in excess of 8 hours (130% x hourly rate)Night shift overtime hourly rate: 1.1 x (1.30 x 112.5)= Php 89.375/hour. If you find this site useful and want to show your support, feel free to … 110% x number of hours in excess of 8 hours (130% x hourly rate)Monthly rate: Php10,000Daily rate (20 working days/month): 10,000/20= Php500Hourly rate (8 hours): 500/8= Php 62.50, What is the overtime pay computation for employees working on a night shift during a special day? Calculating for your employees’ overtime, holiday, rest day, and/or night differential premiums is not a walk in the park. Ensuring your workspaces are ready for your return and the new norm. Can employers/business owners require their employees to render overtime work?The law does not encourage employers/business owners to ask their employees to do overtime work. Women and young persons are prohibited from night work. These rates are set by the Wage Rationalization Act, Republic Act No. “This is pursuant to our existing policy to recognize voluntary work arrangements between companies and their employees that is mutually beneficial and does not diminish existing standards and benefits such as overtime pay premium and night shift differential,” Labor Secretary Silvestre H. Bello III said. The worker should be paid overtime pay, equivalent to 125% of his usual rate per hour. As far as the rate of night work is concerned, night shift employees must be paid a differential of at least 10% of the regular wage for each hour of work performed between 10:00 p.m. and 6:00 a.m. Let say the employee hourly rate is Php 57.00/hour and working from 10pm to 6am; To determine the employee Night Differential pay: Special Holiday Rest day Night Differential = (Hourly … Hours of worked include all time during which an employee is required to be on duty or to be at a prescribed workplace and all time during which an employee is permitted to work. However health personnel in cities and municipalities with a population of at least one million, or in hospitals and clinics with a bed capacity of at least one hundred may be required to work additional hours where exigencies of the service require. Overtime Work Work may be performed beyond eight hours a day provided that the employee is paid for the overtime work, which consists of an additional compensation equivalent to his regular wage plus at least 25% thereof. When they work the night shift they are paid a shift differential of $2 an hour. Night Shift Differential in the Philippines WHAT IS NIGHT SHIFT DIFFERENTIAL Article 86 of our labor provides that every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in … Can an employee demand overtime work from the employer?The employee cannot urge or oblige the employer to let him or her to render overtime work if it is not required by the circumstance or there is no extra work to be done. Under Philippine labor laws, an employee who works between 10 p.m to 6:00 a.m. should be paid a night shift differential of not less than ten percent (10%) of his regular wage. 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